Progress for the Value style is proving to be slow: the initial roar in January faded to whimper in March. Still, the setup for Value looks favorable as small cap valuations are historically attractive, both in absolute and relative to large-cap equities. In corroboration, key indicators in our broader models show extreme opportunities in Value.

Growth leadership is proving hard to dethrone. “Highest Growth Forecast” returned to the top this quarter. Companies with this profile are the least profitable, and half carry a “sell” rating in our Alpha Composite. Their persistence in outperformance has reached extreme levels in our view, and we consider these stocks to be vulnerable.